Also, if you're planning on retiring early, I think putting these contributions into a taxable account might make sense. You can't touch this money in the 401(k) until you're 59 1/2 without penalties. You'll want some liquidity to live off of between retirement and that age, yes?

A common misconception, and totally untrue. You can roll it over into a traditional IRA after you retire, and take 72(t) distributions, or SEPP. Check out IRS Publication 590 for more info.

That being said, having a taxable account instead of utilizing your after-tax 401k would probably be a better move as you have the freedom to do just about anything with that money. By utilizing the after-tax 401k that your employer allows, you're limiting yourself to just the investment choices your employer chooses. In a taxable account, YOU get to choose where it goes!!!

BTW, I would funnel as much of that after-tax 401k into your Roth contributions, if you're eligible.

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